If there’s any saving grace for 2020, it might be that this is a moment fashion can use to finally get the Latinx consumer right.
The opportunity is huge — and coming into focus as the country celebrates Latinx Heritage Month, which began Sept. 15, and becomes more attuned to diversity along with the growing Black Lives Matter movement.
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There are more than 60 million Latinx people in the U.S., up 20 percent since 2010, according to the Census Bureau. And with a median age of just below 30, versus 38.4 for the country overall, many Latinx consumers are just heading into their careers and coming into their own as consumers.
Collectively, the Latinx community is seen as having more than $1.5 trillion in spending power, according to a widely cited estimate by the University of Georgia.
And while Latinx incomes lag the national average — a gap that’s expected to narrow as college enrollment goes up — it is a community that over-indexes in fashion.
The Census Bureau’s 2018 reading on the consumer landscape pegged income in Latinx households at $65,298 before taxes, 17 percent below the national average of $78,635. Even so, Latinx consumers spent $2,042 on apparel and services, 9 percent more than the average.
All together, a young and growing population that’s upwardly mobile, interested in fashion and is savvy on social media to boot — that’s enough to make any marketing executive’s heart go pitter-patter.
But for all that spending might, the marketing opportunity is a complicated one — and one that fashion brands using big data, artificial intelligence, social media marketing and all the other marvels of the digital world could be better suited to address than ever.
The Latinx consumer is not one group, but more of a collective of peoples who usually, but not always, share a language.
There are many points of origin for the Latinx consumer — from Mexico to Cuba to Brazil to Spain to the U.S. — and each comes with their own distinct tastes and preferences, meaning marketers need to stay on their toes.
Felipe Korzenny, professor emeritus at Florida State University, who literally wrote the book on the topic as coauthor of “Hispanic Marketing: A Cultural Perspective,” said it’s a book that could be written anew every year given the rapid pace of change.
“It’s very difficult today that Hispanics have one kind of demographic or one market,” Korzenny said. “There is a common culture and the common culture does make it feasible to address this population in a relatively homogeneous way.
“What makes it a market, if it is so, is the heritage of Latin America, Spain, the Catholic religion, which is still pretty much dominant, and the Spanish language that is not anymore as universal as it used to be because the majority of the people now are being born in the U.S.,” he said.
Where U.S. brands have erred, Korzenny said, is by taking a “total market approach” and neglecting the cultural differences within the Latinx community.
“Marketers can do so a lot more by focusing more on culture and understanding where people are coming from,” he said.
That could mean looking beyond umbrella terms and labels, such as Latinx or the more commonly used Hispanic, and appealing to consumers by going back to their culture of origin.
“My best guess is that you will do better by not mentioning the label because you don’t have to,” Korzenny said. “What you have to do is forget about labels and concentrate on what makes them unique and what makes them interesting, what is important to them, which is really their tastes, their preferences, their pride.”
The name game is evolving anyway. While the term Hispanic arose in the Seventies, the gender-neutral Latinx was coined in the Nineties, but is still not in common usage, according to the Pew Research Center. A December Pew survey showed that just one-in-four members of the cohort in the U.S. have heard of the term “Latinx,” and just 3 precent use it to describe themselves (it is young women who have gravitated most to the label).
Consultant Nicole Dessibourg-Freer, a principal in Kearney’s consumer practice, self-identifies as part of the cohort as a New Yorker with a Peruvian mother. But she hasn’t warmed to newer term.
“The most P.C. term is Latinx,” Dessibourg-Freer said. “I don’t know if I like it. It’s very difficult to identify with.”
That nuance is just one of the elements marketers have to be mindful of as they reach out to Latinx consumers.
“It’s simply not enough to translate what you’re doing into Spanish and call it a day,” she said. “There’s a need to be nuanced.”
Zara — operated by Spanish retail giant Inditex — does a particularly good job of balancing the global nature of its business with the local preferences of its shoppers, she said.
“If I look at a Zara advertising campaign in the U.S. and if I look at it in Spanish, there is a cohesive nature to it,” Dessibourg-Freer said. “You understand the brand is a brand. In some brands, it looks very different. It requires a level of thoughtfulness.”
Thankfully, thoughtfulness is finally in vogue when it comes to race.
Like Pride Month in June, Hispanic Heritage Month comes amid the national conversation on race, diversity and inclusion, sparked by the Black Lives Matter movement and the killing of George Floyd — and too many others — at the hands of police.
The top of the corporate org charts might lack diversity, but the people at the top — mostly white men — are in many cases now talking diversity, both in their own organizations and in how they view consumers.
“It’s becoming a topic that is more interesting to c-level executives because of the discourse that’s going on in the broader society,” said consultant Jonathan Greenway, managing director and co-lead of AlixPartners’ consumer products practice.
That dovetails nicely with the continuing push at many companies to grab more share in what is the second-largest demographic in America.
“The Hispanic market has been big and growing for some time and it’s good business to figure out how they shop differently,” Greenway said.
The pandemic-fueled focus on e-commerce and all its data segmentation, the increased focus on diversity, the maturation of machine-learning and the need to simply grab every dollar possible in an extraordinarily tough economy, could make this the right time for fashion to truly embrace the Latinx market in a sophisticated way.
Marie Driscoll, managing director of luxury and fashion at Coresight Research, said there’s plenty more brands can do to connect with the Latinx consumer.
“When I think of national brands, I can’t think of who’s doing it well,” Driscoll said. “It says to me that there’s a big opportunity. They’re young, which means they care about fashion, are really invested in social media. They care about celebrity, entertainment.
“There’s a big opportunity now, post-COVID to rethink how you go to market,” she said. “Your customer, their needs have all changed and do you target new needs and new customers? One size doesn’t fit all anymore.”
Clearly, the market is on the move — maybe reeling from the overlapping crises of 2020 — but it’s under way and there’s still no telling where it ends up.
Marshal Cohen, chief industry advisor of The NPD Group Inc., said fashion’s marketing focus has evolved rapidly over the pandemic, with the headline constantly changing.
“We were all engaged in looking at the Hispanic market as a big opportunity,” Cohen said, noting the COVID-19 changed the narrative. “Then the world was looking at the shift in spending and the disparity of spending.”
He estimated that spending in the Latinx community has pulled back 10 percent more than the rest of the market. And the intense focus on the Black Lives Matter movement has brands putting more emphasis on diversity in their advertising.
“It’s like an old Benetton ad in the Eighties where they had one of everybody,” Cohen said. “With technology, we have the ability to speak multiple languages and multiple messages.”
Now fashion just has to make the most of the moment and really follow through on its inclusive impulse.